Read about $VIX:$VXV greater than 1.0...
that high ratio rarely occurs...but when it does and the high ratio lasts for a while to create prolonged backwardation,,,that is when TVIX kicks in as a winner...just watch the ratio and learn if it stays above 1.0....
As such, your post is uninformed...words like "always" when talking about any investment suggests considerable ignorance IMHO...do your homework on contango vs backwardation....
Please do short on Monday...bet the farm adventurguy.
Am I correct in thinking we are now in vix backwardation?
If so, then lets see how long it can last with all the confusion....several months perhaps.
If so, then TVIX is a multibagger....
If not, then watch for the drop....
Too bad, so sad for the many gloating TVIX shorts last Thursday at the close...
GLTA...exciting days indeed.
Investopedia: Capital reduction is the process of decreasing a company's shareholder equity through share cancellations and share repurchases.
My opinion is that the bank agreed to the deal as long as 6 of 7 shares held by those entities were cancelled....even though this is what was projected in March as part of the plan, the market evidently did not like it...
here is another report on the topic...dated June 3rd
Hyundai Merchant Marine (HMM) said that following a board meeting today, the company had decided to dilute shares held in the shipping line by its affiliates, in preparation for a debt-for-equity swap with main creditor Korea Development Bank (KDB).
The affected shares will be consolidated in a ratio of 7:1, meaning that every seven shares will be merged into one share. HMM plans to hold an extraordinary general meeting on 15 July to determine the agenda of its reduction of capital concerning affiliates.
Since announcing its restructuring plan back in February, HMM has been executing each process of its efforts accordingly, including sale of assets, debt adjustment with creditors and charter negotiations. Today’s announcement regarding capital reduction is also part of HMM’s business restructuring process in order to prepare the planned debt-for-equity swap with creditors.
According to the plan, the 7:1 capital reduction without refund will be executed for 6,066,273 shares held by Hyundai Elevator (17.51%), 613,563 shares of Hyundai Global (1.77%) and Hyundai Group chairman Hyun Jeong-eun’s 571,428 shares (1.65%).
Such cross-affiliate holdings are common in South Korean companies, and is a common tactic employed by the founding families of chaebols to maintain their grip on the companies.
After the reduction, the stakes of Hyundai Elevator, Hyundai Global and chairman Hyun in HMM will drop to 3.65%. Following the planned debt-for-equity swap after the capital reduction, the state-run KDB is going to be the largest shareholder of HMM.
KDB may play hardball with rates....I don't like to see a 5% drop in SP associated with this news...maybe not a coincidence...thoughts?
7-to-1 to make room for debt-to-equity....
Korea Development Bank (KDB) is taking over troubled local line Hyundai Merchant Marine (HMM). HMM said it decided today to implement a capital reduction without refund for the stakes held by the company’s affiliate major shareholders by 7 to 1.
This is the latest process in HMM’s restructuring plan which started in earnest in February as the line fights $5bn in debts.
According to the plan, the 7 to 1 capital reduction without refund will be executed for 6,066,273 shares held by Hyundai Elevator (17.51%), 613,563 shares of Hyundai Global (1.77%) and Hyundai Group chairman Hyun Jeong-eun’s 571,428 shares (1.65%).
After the reduction, the stakes of Hyundai Elevator, Hyundai Global and chairman Hyun in HMM will drop to 3.65%. Following the planned debt-equity swap after the capital reduction, the state-run Korea Development Bank (KDB) is going to be the largest shareholder of HMM. KDB is among the most powerful institutions in shipping these days, being the de facto boss of many leading Korean yards as well as other lines too.
It is expected that the operation of HMM will be stabilized under the systematic management and support by KDB should it become the largest shareholder of the company,” HMM said in a release. The line is still confident it can join THE Alliance, the newest container grouping, announced last month.
HMM plans to hold an extraordinary general meeting on July 15 to determine the agenda of its reduction of capital concerning affiliates.
Learned a few lessons from a fleeting interest in BBEP about MLP with high debt....and creditors goals of wiping out unit holders.
Seems low cost credit is drying up.
The US shale producers are now nervously standing like a line of towering dominoes that are starting to fall...BK seems to be their solution even if balance sheets not so bad, because BK may allow cancellation of debt without tax liabilities...
CPLP plans to pay debt well worth the cut in distribution IMHO...we don't want to be the next domino.
...I'll guess default and a big fat #$%$ from the CEO to the self-righteous Dig.
Zoo seems to have his ducks in a line... he is ready for all outcomes tomorrow, in a month or a year.
BTW, the person who keeps using the phrase "aye Dopes?" is really a piece of work on this board.
I really doubt she is a paid basher...
More likely a bored criminal, an ISIS wife, or a meth-driven prostitute who is forced to make these constant posts by her pimp...get a life, aye Dope?
In any case, she is effective, as I am really sick of her posts...
Agree...more complex than I can fathom.
Seems unlikely that they will pay interest on Monday, but they may default without BK, or have some other plan...
My interest was in the odds of current unit holders staying whole for coming years...odds seem low.
If current unit holders stay whole, will consider buys on the rise...right now seems quite risky.
from thetaxadviser (goog it, seems like a pretty good site)
Bankruptcy exclusion: Under Sec. 108(a)(1)(A), COD income is excluded from gross income where the discharge of indebtedness is granted in a Title 11 case, which includes Chapter 11 reorganizations, Chapter 7 liquidations, and Chapter 13 bankruptcy proceedings under Title 11 of the U.S. Code. This exclusion applies only if the discharge of indebtedness is granted by a court order or in a court-approved plan (Sec. 108(d)(2)).
When debt is discharged in bankruptcy, the bankruptcy exclusion rules govern, even if one of the other exceptions would have applied (Sec. 108(a)(2)(A)); this treatment is important since the required reduction of tax attributes differs depending on which COD income exclusion applies.
FWIW...this scared me away yesterday...even if no Fidelity note, it is hard to get around the advantages of dodging CODI when BBEP has so much debt...
If you did not see this post earlier, then Zoo could be alias for someone that you had on ignore...
In that case, the "Fidelity" news is indeed suspect...
In any case, it scared me away until some kind of verifiable news...
Best of luck to all, I hope it works out for those little guys who are spending their own money to better themselves.
yep, it never went away....
Made sense to this casual observer...ain't no way the lenders will be nice to current owners unless they are forced to do so...
immediate issue is default, they should have paid already if they had cash and plan to save company from restructure...hints of other plans...time will tell as it always does...
get a grip dig.
Thanks for that clarification.
In that case, the Magnum Hunter playbook seems like a win-win for all involved except the current unit holders. The greed-play for current creditors/bondholders is to have company value soon become assessed as lower due to oil crash and uncertain future...as a result, they can employ voluntary CH11 debt-for-equity to assume total ownership...and tell the current unit holders to take a hike.
The Magnum investors squawked at this approach, but it didn't get them anywhere that I can tell...Magnum now stronger with new owners and dumped CEO.
That makes some sense...voluntary debt for equity CH11 like magnum. Might explain ongoing interest in bonds.
I may be mistaken, but didn't ALL existing equity (common and preferred) get wiped out and replaced by bondholders as new equity?
Are you suggesting they should dilute existing units with additional debt-to-equity units to solve codi instead of wiping out existing unit holders?
Sorry, but I gotta jump in here with some suggestions...
Take your lumps and move on.
Don't become a frustrated victim.
Deal with the world as it is.
Hug your wife and kids, and explain what YOU did with the $$$, not some imaginary villains that the mass media is programming you to blame.
Thanks for your reply. I couldn't find that info. Is that a general feature of bond repayment schedules, or do they vary from company to company?
According to your reply, they may have enough cash to pay...
If they have enough to pay, then why not simply pay to preserve the SP?
Why all the suspense?
Newbie here interested in possibility of no default...noBK
On May 15th,wont they have both the April 15th + the May 15th payments due?
Do they have that much cash?
and this tickle..." reduction rate may be lower than that level"...lower than 28%...maybe?
Since February, Hyundai Merchant has been in talks with ship owners to cut the rates and the negotiations are reportedly in the final stage.
Industry sources said Hyundai Merchant is working to lower the rates by some 28 percent on average, but the reduction rate may be lower than that level.
Related news...now 28-30% cut in rates...
Creditors led by the state-run Korea Development Bank are soon to come up with a detailed plan to inject new capital for Hyundai Merchant Marine, as the ailing shipping firm is near completing negotiations with shipowners over ship leasing fees.
Creditors next week will start discussing a debt-to-equity swap plan, KDB spokesman Cho Seong-wook said Wednesday. A debt-to-equity swap refers to swapping loans into stocks of the company to alleviate liquidity crunch.
Currently, Hyundai Merchant’s secured debts to financial institutions amount to 1.1 trillion won, according to the nation’s No. 2 shipping firm. About 50 to 60 percent of the amount may be injected as a debt-to-equity swap scheme, industry sources said.
The creditors had earlier said that they would roll over debts and inject fresh loans for Hyundai Merchant, on the condition that the company lowers ship leasing rates
Hyundai Merchant refused to reveal how much charter rates the company should negotiate to cut, saying it would affect bargaining power. Local media speculated a rate cut of about 28-30 percent.
The creditors and the government had earlier urged the company to complete negotiations with shipowners by May 20.
Tea leaves say that HMM is not going under...good for CPLP!
Lotte agrees to buy controlling stake in Hyundai Logistics
2016.05.11 17:23:15 | 2016.05.11 17:32:23
Lotte Group, one of the South Korea’s largest conglomerates, will acquire a controlling stake in Hyundai Logistics Co. for 410 billion won ($350 million) in hopes to strengthen its retail and logistics business.
The majority stake of 88.8 percent in Hyundai Logistics is owned by IGIS I Corp. a special purpose company (SPC) set up by Orix Private Equity with a 35 percent stake, Lotte Group with a 35 percent, and Hyundai Merchant Marine with a 30 percent.
The transaction is expected to ease the cash crunch of struggling Hyundai Merchant Marine. The shipping company took its current stake in Hyundai Logistics for 100 billion won in September 2014.
Fair enough...lets see how they do going forward...CPLP looks oversold...maybe you will be praising the young Turks (Greeks) in a year or two.
thanks for your reply.
Bad communication, lack of stock repurchases, and issuance of the shelf filing at a terrible timing...
...but we remain afloat with 10% divi-dist for current buyers...go figure..
Serious question: Which management team in shipping has done a better job in this environment, and which team will do better moving forward?